CIHM 
Microfiche 
Series 
(Monographs) 


ICMH 

Collection  de 
microfiches 
(monographles) 


m 


Canadian  Inatituta  for  Historical  Microraproductioni  /  Inititut  Canadian  da  microraproductiona  hiatoriquaa 


1995 


Technical  and  Bibliographic  Notes  /  Notes  technique  et  bibliographiques 


The  Institute  has  attempted  to  obtain  the  best  original 
copy  available  for  filming.  Features  of  this  copy  which 
may  be  bibliographically  unique,  which  may  alter  any  of 
the  images  in  the  reproduction,  or  which  may 
significantly  change  the  usual  method  of  filming  are 
checked  beiow. 


0 

D 

D 

D 
D 

n 

D 

D 
D 

n 


Coloured  covers  / 
Couverture  de  couleur 

Covers  damaged  / 
Couverture  endommagee 

Covers  restored  and/or  laminated  / 
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Blank  leaves  added  during  restorations  may  appear 
within  the  text.  Whenever  possible,  these  have 
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apparaissent  dans  le  texte,  mais,  loisque  cela  itaH 
,  ces  pages  n'ont  pas  etc  fllmees. 


L'Institut  a  microfilme  le  meilleur  examplaire  qu'il  lui  a 
ete  possible  de  se  procurer.  Les  details  de  cet  exem- 
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ayant  des  colorations  variables  ou  des  decol- 
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This  ittm  is  filmed  at  the  reduction  ratio  checked  below/ 

Ce  document  est  filme  au  taux  de  rcductron  indique  ci-dessous. 

10X  14X  lex 


22X 


U 


Th*  copy  fllmtd  h«r«  hat  b««n  raproducfd  thank* 
to  tht  ganarotity  of: 

National  Library  of  Canada 


L'axamplaira  film*  fut  raproduit  grlea  k  la 
SAntroaitt  da: 

Blbllotheque  nationals  du  Canada 


Tha  imagaa  appaaring  hara  ara  tha  batt  quality 
potaibia  contidaring  tha  condition  and  lagibillty 
of  tha  original  copy  and  In  kaaping  with  tha 
filming  contract  apoclficationa. 


Lat  imaga*  tulvantat  ont  it*  raproduitat  avac  la 
plua  grand  loin.  compta  tanu  da  la  condition  at 
da  la  nattat*  da  l'axamplaira  fllmt,  at  an 
conformity  avac  laa  condltlona  du  contrat  da 
fllmaga. 


Original  copiaa  in  printad  papar  covar*  ara  fllmad 
baginning  with  tha  front  covar  and  anding  on 
tha  laat  paga  with  a  printad  or  illuatratad  impraa- 
tion,  or  tha  back  covar  whan  approprlata.  All 
othar  original  copiaa  ara  filmad  baginning  on  tha 
firat  paga  with  a  printad  or  illuatratad  impraa- 
aion.  and  anding  on  tha  laat  paga  with  a  printad 
or  illuatratad  impraaaion. 


Laa  aaamplairaa  orlglnaux  dont  la  couvartura  an 
papiar  aat  imprlmaa  tont  filmtt  an  commancant 
par  la  pramlar  plat  at  an  tarmlnant  toit  par  la 
darnltra  paga  qui  eomporta  una  amprainta 
d'Impraaaion  ou  d'illuatration.  soit  par  la  lacond 
plat,  aalon  la  cat.  Toua  laa  tutrat  axamplairat 
originaux  tont  filmAt  an  commandant  par  la 
pramiAra  paga  qui  eomporta  una  amprainta 
d'Impraaaion  ou  d'illuatration  at  an  tarminant  par 
la  darniara  piga  qui  eomporta  una  tall* 
amprainta. 


Tha  laat  racordad  frama  on  aach  microficha 
*h*ll  contain  th*  symbol  -^  lm**ning  "CON- 
TINUED"!, or  tha  symbol  V  Imaaning  "END"), 
whichavar  applia*. 


Un  daa  aymbol**  *uivanta  apparaitra  *ur  la 
darnitra  Imaga  da  chaqu*  microfich*.  •*lon  I* 
caa:  la  tymbolo  —^  algnifi*  "A  SUIVRE".  I* 
*vmbola  V  aignifia  "FIN". 


Mapa,  piataa,  chart*,  ate.,  may  ba  filmad  at 
diffarant  raduction  ratio*.  Tho*a  too  larga  to  ba 
antlraly  Included  in  ona  axpoaura  ara  filmad 
baginning  in  tha  uppar  laft  hand  cornar,  laft  to 
right  and  top  to  bottom,  aa  many  framaa  aa 
raquirad.  Tha  following  diagram*  illuitrata  tha 
mathod: 


La*  cartaa.  plancha*.  tablaaux.  ate,  pauvant  atra 
fllmt*  t  da*  taux  da  reduction  diffirants. 
Loraqua  la  document  aat  trap  grand  pour  itra 
raproduit  an  un  aaul  elich*.  11  aat  film*  i  partir 
da  I'angla  (upAriaur  gaucha.  da  gaucha  1  droite. 
at  da  haut  an  baa,  an  pranant  la  nombra 
d'imagaa  ii*ca**aira.  La*  diagrammas  tuivants 
liluatrant  la  mathod*. 


1 

2 

3 

1 

2 

3 

4 

5 

6 

MICfOCOfV   tISOlUTION   TBT   CHART 

(ANSI  and  ISO  1£ST  CHART  No.  2) 


1.0 

Ifl^  tii 

^ 

I.I 

t_*^  im 

"^      I 


1.8 


-APPLIED  IN/MGE 


1 


vvv.-:..^V' 


^'"  ■  ^4..-^-;  V±;., 


^^L' 


m^is^.. 


PREFERENTIAL  TRADE  BETWEEN 
BRITAIN  AND  CANADA 


ADAM  SHORTT 


reprinted  from 

Papers  and  Prockkdings  of  the  Skventhentb  Annvai.  Meeting 

American  Economic  Association 

december,  1904 


-'>■  -^  ''■..-■ 


'■i'\' 


PRKKKRKNTIAL  TRADIv    BlvTVVKIiX  BRITAIN 
A\l>  CAXAIJA 


AD^M    SUOH'n 


PRia'KRK.VTIAI-  TRADI';  HIvT\VKi:X    BRITAIN 
AND  CANADA 

The  qUfstiuM  of  prcfer-jiitial  trade  as  between  Kritain 
anil  licr  colonies  is  one  into  wllicll  tlleory  enters  merely 
as  one  of  the  f.ictors  in  a  con'-rete  situation.  As  every 
elosc  stnilent  of  practical  affairs  is  aware,  in  concrete 
situations,  doubtful  or  false  theories  often  have  much 
more  wciuhl  and  are  far  iu"re  real  than  true  ones,  in 
the  sense  at  least  of  actually  iuflueuciuK  actions  and 
prodnciutf  results.  In  dealing  with  concrete  national 
policies  wc  have,  therefore,  to  ask  such  leading  questions 
as  the  followini; :  What  do  these  jjeople  imaKiue  they 
are  doinj;?  What  are  they  actually  doing?  What  can 
they  be  persuaded  to  attempt?  ,\nd,  if  astray,  how 
long  will  it  Ik-  before  they  discover  their  mistake?  .And, 
very  often,  what  kind  of  new  mistake  will  be  acccpteil 
as  a  remedy  tor  the  old  ? 

Now,  at  first  siglit,  it  u:iglit  seem  strange  that  C.in.ada 
should  have  any  difficulty  about  preferential  trade  with 
Britain,  when  she  apparently  originated  the  scheme, 
first  put  it  into  practice,  and  still  substantially  .stands 
by  it,  even  if  in  modified  form  and  with  growing  op- 
position on  the  part  of  special  interests.  In  order, 
therefore,  to  .show  whence  aro.se  tlic  present  situation 
and  wliat  are  its  leading  characteristics,  it  will  be 
ueces.5ary  to  summarize  a  little  tariff  history  in  connec- 
tion with  the  advent  to  power  of  the  Liberal  I'arty  in 
Canada  and  its  policy  in  dealing  with  the  tariff. 

The  Liberal  Parly  during  its  last  period  in  opposition, 
from  187S  to  1896,  had  steadily  opposed   the  principle 


■♦I 


National  Ubrary    BbNotMqua 
of  Canada  du  Canada 


i 


of  a  lii|{li  protective  tariff.  In  the  interests  of  the 
public  at  larRc,  but  witliout  prejudice  to  the  uianu- 
.'.  '  rers,  they  advocated  such  frecduni  of  trade  as  was 
cot"  stent  with  a  tariff  for  revenue  only.  They  par. 
licnlarly  favoured  the  promotion  of  trade  with  Hrilaiu 
and  the  United  States.  Latterly  they  took  comfort 
and  cnconragcinent  from  Mr.  Cleveland's  campaiRus  for 
a  lower  taiifT.  As  the  people  of  Canada  were  bejjinniuE 
to  discover  that  the  pro-sperity  promised  b^  the  National 
Policy  was  rather  slow  in  arriving,  the  Liberal  policy 
was  rapidly  makiuR  converts.  Kven  Conservative 
leaders  talked  tariff  reform,  though  the  majority  still 
adhered  to  the  principle  which  had  brought  them  into 
power  and  had  for  some  time  sustained  them.  The 
principle  of  reciprocal  trade,  on  the  basis  of  treating 
other  countries  as  they  treated  Canada,  had  been  fre- 
quently discussed,  bnt  came  more  definitely  into  view 
during  the  Inst  years  of  Conservative  rule.  Tlie  projjo. 
sition  was  give  lec^al  point  under  the  influence  of 
the  Dingley  tai.a,  which  greatly  cooled  tlie  ardor  of 
Canadians  for  better  trade  relations  with  the  United 
States,  and  turned  attention  towards  the  value  of  the 
British  market  for  Canai'ian  goods  and  the  possibility 
of  a  more  favourable  treatment  of  British  imports  in 
return.  At  the  same  time  the  Liberal  I'arty,  more 
particularly  under  the  leadership  of  Mr. — afterwards 
Sir  Wilfrid— Laurier,  recognized  the  impossibility  of 
altogether  abandoning  the  principle  of  protection  with 
reference  to  those  industries  which  had  been  brought 
into  existence  through  the  National  Policy,  but  wliich 
had  never  been  able  to  >  ..tgrow  their  infancy.  Still, 
the  party  continued  to  advocate  a  considerable  read- 
justment and  modificatiin  of  the  protective  principle, 


in  the  iiitcrnti  of  consiiiners  and  of  indnstrics  naturnl 
to  the  country. 

I'mlcr  such    plcdR^,,    the    L.bcral   Party  came  into 
rwwcr  ill   ,896.     nnct  in  ..(fic.-,   tlicir  view,  on   tariff 
reform  were  still  further  modified.     This  was  in  some 
measure  due  to  the  repre.seutatious  of  the  manufacturers 
before  a  tariff  comini.«iou  which   the  new  government 
appointed.     Resentment   at  the  anti-Cauadian   clauses 
in  the  Din^ley  tariff  had  been  steadily  KrowiuR,   while 
the  liberality  with  which  llrilain  had  treated  Canadian 
imports  was,  hy  contrast,  being  more  vividly  realized. 
The  liberal  Government,   therefore,  on  succeeditiK  to 
office,  found  itself  between  two  fires.     ()„  the  one  hand 
It  was   e.K,«cted  to   redec.n  it,  ple<lt;es  to  favour  the 
c<  'suiner  and  lower  the  tariff,  while  on  tlie  other  it  was 
nrRed   to  respect  the  establishe.l  system  under  whicli 
the  industries  of  the  country  had   been   protected  from 
hostile  competition.     The  principle  <,f  reciprocal  tariff, 
afforded  a  clue  to  a  practical  policy  of  ingenious  com. 
promise,  whicu  would  enable  the  government  to  claim 
the  virtual  redemption  of  its  pledges,  while  at  the  same 
time    avoiding    the    unpopular   course   of    apparently 
turning  the  other  cheek  to  the  United  States. 

H,  the  new  tariff  policy  of  1897,  after  a  well  con- 
sidered  readjustment  of  various  specific  articles,  in- 
eluding  the  raising  of  duties  in  a  few  instances  a 
general  reduction  of  the  tariff  by  ,2^  per  cent,  except 
on  a  few  articles  such  as  spirits  ..nd  tobacco,  was  granted 
upon  imports  from  all  countries  which  admitted 
Canadian  goods  at  equally  low  rates  of  duty.  This 
seemingly  sweeping  reduction  of  the  tariff,  which  con- 
stituted  the  redemption  of  the  party  pledges  given  while 
in  opposition,  was  found  on  examination  to  apply  to  no 
considerable  traffic  outside  that  with  Britain.     In  virtue 


of  special  cl.iiUM  in  Hritiili  nimiiurcin!  trt.itiri  with 
Cicnnany  ami  It'lijiHm,  (;imk1s  from  tlirse  coiiiitiics  wire 
alsii  included,  ptiiilifn;  a  dennnciation  of  the  treatii's, 
which  siioii  triiik  place.  As  |)riiniiHcd  in  1H97,  a  further 
reduction  of  the  tariff  took  place  the  folluwiin;  vear, 
increasini;  the  preference  ti>  25  per  cent.  As  the  device 
had  proved  a  very  popular  one,  and  its  limited  applica- 
tion was  now  well  r.'cojjnizcd,  the  wording  of  the 
preference  was  changed  from  the  Reneral  to  the  par- 
ticular, and  the  reduetitui  specifically  limited  to  the 
British  Kmpire,  allhouKli  inipi<rtant  sections,  such  as 
Australia,  have  not  yet  availed  themselves  of  it. 

Thus  the  Canadian  preference  on  Hritisli  imports  was 
the  outcome  of  no  liarjrain  with  the  liritish  (',.)vcrnmcnt, 
or  of  no  th  ries  as  to  the  advantages  of  intcr-imiHrial 
trade.  It  pressed  no  sacrifices  011  the  part  of  Canada 
for  the  hencfit  of  the  mother  country.  It  was  under- 
taken entirely  in  the  interests  of  Canada,  and  as,  nnder 
the  conditions  of  the  time  e  only  advisable  direction 
in  which  to  carry  out  the  reiieated   pledges   of  the 

Liberal  Party.  Their  political  opponents  strongly 
criticized  the  preference  on  the  ground  of  its  being  an 
infringement  of  the  National  Policy,  and  a.s  certain  to 
affect  most  injuriously  the  industries  of  the  country. 
This  position  has  never  been  given  up  and  is  still  em- 
ployed in  ap|)eals  to  the  manufacturing  interests.  Hut, 
a.-  soon  as  it  was  perceived  that  the  preference  was  by 
no  means  about  to  accomplish  the  promLsed  ruin  of 
Canadian  industries,  the  Conservatives  shifted  their 
centre  of  attack,  and  made  a  vigorous  assault  upon  the 
Government  for  having  gratuitously  granted  to  the 
mother  country  a  valuable  concession  'vithout  exacting 
any  sacrifice  in  return. 

This  criticism,   it  will  be  observed,  proceeded  upon 


two  assumptions  :  First,  *at  Canada  did  not  undertake 
to  lower  the  tariff  upon  British  goods  for  her  own 
benefit,  but  had  made  a  distinct  sacrifice  of  her  normal 
interests  for  the  express  benefit  of  Britain  ;  Second, 
that  Britain  would  have  been  willing  to  alter  her  whole 
fiscal  system  and  tax  her  world  supply  of  food  and  other 
raw  materials,  as  a  return  for  the  Canadian  concession 
on  less  than  five  per  cent  of  her  trade.  Neither  of 
these  assumptions  was  true. 

Nevertheless,  under  the  influence  of  subsequent 
events,  it  has  come  to  suit  the  tactics  of  the  Liberal 
Party  to  accept  the  general  interpretation  of  the 
preferential  tariff,  as  a  sacrifice  made  by  Canada  in 
favour  of  the  mother  country.  It  is  represented,  how- 
ever, as  a  sacrifice  prompted  by  pure  generosity,  and 
thus  as  contrasting  with  the  harsh  and  ungenerous 
Conservative  policy  of  an  eye  for  an  eye  and  a  tooth 
for  a  tooth.  Of  course  the  Canadian  favour  might  or 
might  not  be  met  by  some  equivalent  concession  on  the 
part  of  Britain,  but  as  far  as  Canada  was  concerned  it 
was,  noblesse  oblige. 

Tactically  the  Liberal  position  enjoys  an  immense 
advantage  over  that  of  its  opponents,  for,  on  the  one 
hand,  it  proves  the  Liberal  party  to  be  much  more  loyal 
and  at  the  same  time  magnanimous,  than  the  Con- 
servatives, towards  the  mother  country.  And  this  has 
a  fine  local  flavour,  since  the  Conservatives  have  always 
attempted  to  pose  as  the  party  of  loyalty,  par  excellence, 
and  have  affected  a  more  or  less  pharisaicul  attitude  of 
suspicion  towards  the  implied  republican  tendencies  of 
the  Liberals.  On  the  other  hand,  while  exacting 
nothing  from  Britain,  the  Liberal  Government  may 
gracefully  decline  to  concede  further  preferences  until 
Britain  has  returned  the  compliment.     Moreover,  with- 


7 

out  the  embarrassing  necessity  of  breaking  any  bargain, 
or  receding  from  any  agreements,  the  government  may 
modify  or  withdraw  any  part  of  tlie  preference,  wherever 
it  lias  a  tendency  to  unduly  stimulate  the  importation 
of  British  goods.  This  was  actually  accomplished,  last 
session,  in  the  case  of  textiles. 

And  now  as  to  the  influence  of  the  preferential  tariff 
in  stimulating  imports  from  Britain  or  from  the  rest  of 
the  Empire.  As  the  adoption  of  the  preference  hap- 
pened to  coincide  with  the  beginning  of  the  recent 
period  of  economic  expansion  throughout  America,  in- 
creasing prosperity  accompanied  its  career  and  led  to  its 
being  well  received.  But  it  by  no  means  had  the  effect 
anticipated  by  either  friends  or  foes.  Except  in  the 
textile  trade  and  some  sections  of  the  metal  industries, 
the  preferential  treatment  of  British  goods  did  not 
specially  stimulate  importation ;  and  even  when,  in 
1900,  the  preference  was  increased  to  33  >f  per  cent.,  no 
appreciable  difference  was  noted.  Canadian  imports  all 
round  have  greatly  increased  during  the  preferential 
period,  and  British  imports  among  the  rest.  But  the 
significant  fact  is  that,  in  spite  of  the  preference,  British 
imports  have  failed  to  increase  at  anything  like  the 
same  ratio  as  those  from  foreign  countries,  as  the  fol- 
lowing table  will  show.  Taking  the  values  of  goods 
entered  for  home  consumption  from  the  leading  coun- 
tries of  the  world,  and  also  the  total  imports,  and  com- 
paring the  year  1896,  which  was  the  year  before  the 
introduction  of  the  preference,  with  the  year  1903,  we 
have  the  following  results  : 


8 

VALUE  OF  GOC    1  BNTBREI)   FOR  HOME  CONSUMPTION 
FROM 

Percentage 

1&96.  1903.              of 

lucttaie. 

Great  Brit«ta 1  32,979,74J  $58,896,901          78 

United  State. 58,574.024  137,605,195  135 

P™"" -- a,8io,94J  6,580,029  134 

Germany 5.931,459  12,282,637  107 

Si"'" 361.778  823,944  128 

P°"°«»' ii6,596  129,192  17S 

J'"''' 230,917  541.785  135 

"""I'"* 299,852  1,270.540  314 

B=1k'<">' 920,758  2,800,182  200 

Newfonndland 551.412  1,197,581  117 

West  Indies 1,896426  2,379,275          25 

Switzerland... 332,120  944,727  182 

Total $110,587,480        $233,790,516        III 

That  the  preference  has  not  arrested  the  downward 
tendency  of  the  share  of  Britain  and  tlie  rest  of  the 
Empire  in  Canada's  imports  is  further  shown  when  we 
compare  the  percentages  by  decades  from  1883  'o  1903  : 

PERCENTAGE  OF  CANADIAN    IMPORTS  OBTAINED  FROM 
1SS3.  1S93.  igo}. 

Great  Britain ....42.27  35.45  25.19 

The  British  Empire 45.3.1  37.75  jj  g, 

Foreign  Countries 54.68  62.25  72.19 

That  the  decline  is  still  continuing  is  shown  from  the 
latest  statistics.  According  to  the  British  trade  returns 
for  the  first  nine  months  of  this  year,  as  compared  with 
the  first  nine  months  of  last  year,  we  have  a  decline  in 
the  British  exports  to  Canada  and  Newfoundland  from 
S44,io8,2i5  to  842,618,460,  or  a  loss  of  nearly  one  and 
a  half  millions  in  the  last  nine  montlis. 

Taking  the  percentage  of  the  total  Canadian  imports 
obtained  from  Great  Britain  and  the  United  States  re- 
spectively, in  1896  and  1903,  and  also  the  proportion  of 
duty  paid  on  British  and  American  imports,  we  have 
the  following : 


\ 


■Ptrcentagtt  of  Total 

Canadian  Imports 
"    ~  From  U.  i 


I 


1896. 
1903- 


From  G.  B, 

39.83 

35.19 


53.91 
58.S6 


Pirctntagti  oj   Tutal  Duly . 

Collfcttd 
On  flrtt.  Imps-     On  Ame^.  Imps. 

,>6  39 
36.52 

3S.42 
46,0 

From  this  we  learn  that  whereas  between  1896  and 
1903  the  percentage  of  British  imports  has  declined 
from  29  to  25,  the  percentage  of  American  imports  lias 
increased  from  52  to  58.  Bnt  on  the  25  per  cent,  of 
British  imports  in  1903,  notwithstanding  the  prefer- 
ence, 26  per  cent,  of  the  whole  revenue  was  collected, 
while  on  the  58  per  cent,  of  American  imports  only  46 
per  cent,  of  the  total  levenue  was  collected. 

Now  what  these  fignres  indicate,  and  what  might  be 
illustrated  with  mnch  greater  detail  did  time  permit,  is 
this:  In  the  first  place,  we  obtain  from  Great  Britain 
mainly  mannfactured  goods.  Such  raw  materials  as 
she  sends  us  are,  as  a  rule,  not  her  own  product.  To 
considerably  increase  the  importation  of  British  maini- 
factured  goods,  beyond  what  we  have  always  taken  be- 
cause we  needed  them  or  could  not  produce  them  our- 
selves, would  involve  cutting  in  upon  our  own  manu- 
facturers, as  in  the  case  of  the  textile  and  metal  indus- 
tries, where  under  the  preference  the  chief  increase  in 
British  imports  has  been  secured.  Now  our  Canadian 
manufacturers  strenuously  object  to  sacrificing  any  part 
of  the  home  market  to  competitors  in  Britain,  and  that 
they  are  quite  capable  of  making  their  objections  felt  is 
evident  from  the  partial  repeal  of  the  preference  at  the 
last  session  of  the  Canadian  Parliament.  Once  assure 
them  adequate  protection,  however,  (and  Americans  will 
quite  understand  what  that  signifies,)  and  they  have  no 
serious  objection  to  taking  as  much  further  protection 
against  the  world  beyond  the  empire  as  the  Canadian 
people  may  be  willing  to  grant  them,  under  the  impres- 


sion  that  thereby  they  are  affording  a  preference  on 
British  imports.  And  if,  in  retnni  for  such  a  prefer- 
ence, the  British  public  can  be  persuaded  to  place  a  duty 
upon  those  articles  of  food  and  raw  material  which  we 
send  them,  when  they  come  from  beyond  the  Empire, 
the  manufacturers  will  hold  up  both  hands  for  it,  since 
it  may  have  a  tendency  to  increase  the  number  of 
settlers  in  Canada  to  become  customers  for  their  goods. 
In  other  words,  if  Britain  will  send  us  settlers  and  take 
their  produce  under  a  preference,  our  manufacturers  will 
gladly  supply  the  wants  of  the  settlers  for  manufactured 
goods.  It  is  only  fair,  however,  to  many  of  our  more 
straightforward  manufacturers  to  say  that  they  regard 
such  proposals  in  their  proper  light.  Having  too  much 
respect,  alike  for  themselves  and  their  fellow  citizens  in 
Britain,  they  frankly  declare  that  adequate  protection 
to  Canadian  industry  means  the  virtual  abolition  of  any 
real  preference  to  Britain. 

But  Mr.  Chamberlain  himself,  before  he  started  out 
on  his  present  strategic  detour  with  a  view  to  outflank- 
ing the  colonies,  was  fully  alive  to  the  significance  of  a 
preference  which  involved  as  a  basis  adequate  protection 
for  the  colonial  manufacturer.  Thus,  in  his  address  lo 
the  colonial  premiers  at  the  last  Imperial  Conference  in 
London,  hiving  the  Canadian  preference  in  his  .  e,  he 
said,  "  But,  so  long  as  a  preferential  tariff,  even  a  muni- 
ficent preference,  is  still  suflSciently  protective  to  exclude 
us  altogether,  or  nearly  so,  from  your  markets,  it  is  no 
satisfaction  to  us  that  you  have  imposed  even  greater 
disability  upon  the  same  goods  if  they  come  from 
foreign  markets,  especially  u  the  articles  in  which  the 
foreigners  are  interested  come  in  under  more  favourable 
conditions."      And,  with  special  reference  to  Canada, 


"  in  spite  of  the  preference  which  Canada  has  given  us, 
her  tariff  has  pressed  and  still  presses,  with  tlie  greatest 
severity  upon  her  best  customer  and  has  favoured  the 
foreigner,  who  is  constantly  doing  his  best  to  slnit  out 
her  goods."  Now  this  position,  in  the  light  of  recent 
movements  and  discussions  on  the  part  of  the  Canadian 
manufacturers,  is  more  valid  to^ay  than  it  was  t.vo 
years  ago. 

But,  say  some,  when  cornered  on  this  point,  let 
Britain  supply  the  goods  now  furnished  to  Canada  by 
other  countries,  such  as  tlie  United  States,  Germany, 
France,  etc.,  and  the  preference  will  surely  aid  her  in 
doing  so.  The  reply  to  this  is  twofold.  In  the  first  place, 
if  the  present  preference  of  one-third  has  not  enabled 
Britain  to  even  hold  her  own  with  foreign  countries, 
she  will  have  still  less  chance  of  doing  so  when  the 
tariff  is  raised  all  round.  For  one  of  the  chief  objects 
of  the  proposed  increase  is  to  shut  her  out  of  those  lines 
in  which  she  now  has  an  advantage  in  the  Canadian 
market.  In  the  second  place,  a  detailed  study  of  Cana- 
dian  trade  with  Britain  and  her  leading  foreign  com- 
petitors,  especially  the  United  States,  reveals  the  true 
reason  why  neither  the  present  preference  nor  any  other 
that  is  at  all  within  the  range  of  practical  politics,  can 
greatly  increase  the  proportion  of  British  goods  im- 
ported  into  Canada. 

Nearly  sixty  per  cent,  of  Canada's  imports  come  fro 
the  United  States,  and  when  we  examine  them  more 
closely,  we  find  the  great  majority  to  be  made  up  of 
such  goods  as  coal,  raw  cotton,  corn,  wheat,  raw  tobacco, 
cattle  and  other  live  stock,  petroleum,  twine,  carriages,' 
machinery,  settlers'  effects,  fish,  farm  implements,  India 
rubber,  coin  and  bullion,  etc.     More  than  one-half  of 


the  American  imports  are  free  goods,  many  of  them,  in 
consequence,  g„,„g,o  swell  the  volnme  of  onr  experts 
o  Britain  Of  the  dutiable  go«is  a  very  large  proper, 
tion  consist,  of  materials,  implements  and  articles 
which  are  really  not  produced  in  Britain,  or  not  in  such 
forms  as  are  at  all  snited  to  Canadian  needs 

Canadians  and  Americans  live  under  similar  condi. 
ions  ou  this  continent,  have  practically  the  same  fash- 
.ons,  habits  standards  and  methods  of  life  and  work 
They  use  the  same  impleuients,  machines,  means  of 
ransportation,  styles,  material,  and  details  of  buildings 
together  with  all  their  interior  fittings.  Hence,  outside 
of  those  hues  i„  which  Britain  already  holds  most  of 
our   trade,  when  we  do  not  use  Canadian,   we  desire 

Fr"enor"r":f'     ''''""    "^    """'"^    °'-    «"-". 
French  and  other  imports,  we  find  that  a  large  propor! 

t.on  of  them  represent  other  phases  of  specialized  traae 

which  cannot  be  shifted  by  preferendal   arraugemen 

o  her  than  of  the  most  drastic  character.     In  the  case     ■ 

of  raw  materials  and  goods  of  large  bulk,  where  national 

techuical,  aesthetic  and  other  such  qualities  do  not  count 

the  trade  can  be  shifted   by  preferential  treatment,  bu 

these  a„  either  not  furnished  by  Britain  or  she  e  joys 

t4ultd  '•     '''""•  """  "'"^  P^ference'hL 

s  mulated  imports,  it  has  been  chiefly  at  the  expense 
of  the  Canadian  manufacturers  who  live  by  the  tariff 
and  suffer  from  its  reduction.  Unless,  therefore  we 
sacrifice  to  Britain  bodily  those  industries  in  which  her 
goods  are  capable  of  supplying  our  markets,  there  is 
httle  else  that  we  can  put  in  her  way  by  fiscal  arrange- 
ment. This,  then,  is  the  chief  e-planation  of  the  im" 
favourable  statistics  connected  with  the  preference 

On  the  side  of  Canadian  exports  to  Britain,  we  cer- 


'3 
tainly  hav.  nothing  of  which  to  complain,  for  we 
already  find  in  Britain  by  far  the  largest,  most  natnral, 
and  most  accessible  market  which  we  have.  At  present 
she  takes  58  per  cent,  of  our  total  exports,  and  that 
withont  any  sacrifice  on  her  part,  bnt  simpl^  because 
she  finds  it  profitable  to  do  so.  This  is  a  market  capa- 
ble  of  st.ll  further  expansion  if  we  continue  to  im- 
prove  the  quality  of  our  exports,  as  indeed  we  have 
been  doing,  and  this  is  surely  the  only  safe  basis  upon 
winch  any  country  can  hope  to  expand  its  trade  We 
have  no  need,  therefore,  to  clamour  that  extra  burdens 
shall  be  laid  upon  our  fellow  citizens  in  Britain  for  our 
benefit,  especially  when  these  burdens  n.nst  affect  uot 
the  luxuries  of  the  rich  but  the  most  ele.neutary  ueces- 
sar.es  of  the  lite  and  industry  of  the  masses. 

Further,  it  is  an  entirely  uncalled  for  reflection  upon 
our  country   and   our  people  to  represent  the  one  as 
capable  of  attracting  settlers  and  capital  only  on  the 
precarious  basis  of  a  bounty  obtained  from  the  British 
tax-payer;   or  the   other   as   certain   to   repudiate   the 
British  connection  and  resign  their  national  indepen- 
deuce  to  another  connection,  unless  the  people  of  Bri<    n 
bestir  themselves  to  beguile  us  once  more  within      e 
leading  strings  from  which  we  have  escaped.     The  fact 
is  that  our  owu  national  future,  with  its  many  problems 
and  possibilities,  is  opening   out  before  us  with  such 
attractiveness  and  with  such  responsibilities  that  while 
it  is  our  obvious  policy  to  maintain  good  relations  with 
all  the  world,  it  would  be  the  height  of  folly  to  tie  our- 
selves  up  under  any  hard  and  fast  obligation,  either 
commercial  or  political,  for,  in  view  of  our  constantly 
changing  circumstances,  these  might  prove  most  en  - 
barrassing  within  a  very  short  time.     A  country  in  -  ar 


position  must,  in  the  light  of  its  own  experience  and 
that  of  its  neighbours,  retain  a  perfectly  flexible  com- 
mand of  its  policy  and  relationships.  In  that  position 
we  shall  be  in  line  with  the  very  best  traditions  of 
Anglo-Saxon  freedom.  These  also  are  the  only  terms 
upon  which  we  shall  be  able  to  retain  our  respect, 
affection  and  loyalty  towards  the  mother  country,  in 
whose  traditions  we  aie  proud  to  share,  but  which  we 
can  only  retain  with  true  British  self-respect  when  they 
appeal  to  the  obligations  of  honour,  not  to  the  obliga- 
tions of  requisition. 


